Smart Meters Bill (Second sitting) Debate
Full Debate: Read Full DebateSteve McCabe
Main Page: Steve McCabe (Labour - Birmingham, Selly Oak)Department Debates - View all Steve McCabe's debates with the Department for Business, Energy and Industrial Strategy
(7 years ago)
Public Bill CommitteesIf, as we have heard, SMETS 1 can be made fully interoperable with software upgrades, what is the purpose of SMETS 2 meters?
Derek Lickorish: What is the purpose of SMETS 2 meters if we can make SMETS 1 interoperable? To be able to answer that question, you would need to have a review and some evidence on which to base that decision. At the moment, it is beyond my sphere of full knowledge on everything to give a clear-cut answer to that question.
Richard Wiles: SMETS 1 and SMETS 2 need to run in coexistence. I believe that some clients are in prepayments mode, and prepayment is available in SMETS 1 now. I am talking about some specific instances where SMETS 2 is required: for aspects such as high-rise buildings or dual band comms hubs, when that comes into effect, when greater interoperability is required. Certainly from our position, we believe that we can deploy a larger volume of SMETS 1 meters and still help the Government meet the 2020 deadline.
As to SMETS 2, there are specific advantages around interoperability that have been touched on. While each individual SMETS 1 provider creates mini DCCs, as Derek mentioned earlier on, that will be avoided with SMETS 2. However, with enrolment and adoption, we are working with DCC at the moment, and that will allow the interoperability of our estate to be absorbed into the wider continued operation of the smart meter system through DCC.
Derek Lickorish: Can I add to my answer to Alan’s question and build on a point Richard made about interoperability? Although SMETS 2 has some advantages on the one hand, it is not at the data level. If you take mobile phones, they can keep on being produced because they are data interoperable with the network. SMETS 2 meters have to be identical not only for the meter installed today but for those in 15 years’ time as well. This backwards compatibility requirement is built into what we have. SMETS 1 meters are data interoperable, which is why we can make SMETS 1 interoperable relatively easily from the mini DCC position.
I know that all these things are grindingly complicated. We are trying to explain them in a way that I hope is straightforward.
Q
Richard Wiles: There have been publicised delays within the go-live period. The go-live date of November last year was when we had a release of DCC that allowed devices to be installed and to be made interoperable. A statement was made this morning that there are 215 meters on the system. It was envisaged that there would be a considerably higher volume than that now.
Q
Richard Wiles: For the initial programme, by this stage, the figure was meant to be in the millions.
Q
Richard Wiles: Yes.
Have you anything to add on that, Mr Lickorish?
Derek Lickorish: Quickly, yes. Do not forget that the go-live date of November 2016 was a year late anyway. If you look at the original plan, as put together in the business plan by the DCC, the idea was that six months after go-live it would be ready at scale and six months after that the system would be stabilised. It went live last year, in November 2016, and as we all now know, clearly, from the horse’s mouth, it has 215 devices on it now.
Q
Derek Lickorish: When they all go in initially, of course they are not in dumb mode. The percentages vary. I am told that at some stages 20% or more of them are being operated in dumb mode. That occurs for a variety of reasons—for commercial and technical reasons. The way in which the market is evolving is that meter asset providers—MAPs, as they are known—fund these assets that are going on the wall and they will also fund SMETS 2 assets. All the time, there is uncertainty about how long these assets are going to endure and whether the market is going to endure. When are SMETS 2 meters going to be ready?
There is an issue called deemed rentals. What does that mean? It means that if the acquiring supplier does not have the same sort of contract that is with the asset coming in, it gets asked to pay a very high deemed rental, which it will not pay because it renders the customer unprofitable. That means that it faces two choices: putting the meter into dumb mode, or going out and taking out that meter, even if it is the same meter, and putting in one of its own, funded by another meter asset provider.
There is quite a complex set of issues, which only we in this room and others—interested observers—understand to any degree. There is the deemed rental issue and then there is the technical issue, as we have heard. I do not criticise anyone, because everyone is breaking their back to get this programme running. Everyone is working hard, so I do not decry what anyone is doing, but the way it is set up—and it is driven by political milestones—is going to cause perverse behaviour from time to time. I will come back to that.
My final point—I need to shut up—is that we need to get to a situation in which the interim interoperability model can be made to work. It can be made to work because most of the big six have a system called instant energy—a number of them—and we could have some interoperability there, whereby they could take over the asset and resolve this commercial issue. That would deal with consumers’ meters going into dumb mode on change of supplier. It would stop all the stories that the Daily Mail keeps printing about all the problems with SMETS 1 meters. It is not a technical issue, and the SMETS 1 meters are not inferior. Sorry, Mrs Gillan.
Not at all. Mr Wiles, have you anything to add?
Richard Wiles: We have the ability to transmit data into the system that Derek has just referred to, to keep it live. On the point about how many units are kept in dumb mode, or put into dumb mode or non-smart mode, we do not get to see those figures. That is between the energy supply companies; it is not a direct result of the service that we offer, so I cannot give you a definite figure.
However, we can make sure that any unit put in the non-smart mode can be retained live and be reactivated at a later date, and that can be part of the enrolment and adoption figures. Even for smaller suppliers, if they inherit a smart meter system and do not wish to keep it running, or have a separate service until enrolment and adoption goes live, it can be reactivated at a later date.
We aim to finish this session at 3.15 pm, and I have two colleagues who want to speak, Mr McCabe and Mr Kerr. I call Mr McCabe.
Q
Sacha Deshmukh: As ever, there is a health warning on an answer—there is no direct comparator between the supply and demand in different sectors—but there is actually a very healthy level of demand for the current level of supply. At the moment, I think it is fair to say that consumer enthusiasm is very strong, but supply has not yet been able to meet that enthusiasm on the timescale on which those consumers would ideally have liked that product.
That is today’s funnel—or, rather, this year’s funnel, as the analysis by the energy suppliers has shown. Looking at next year, you see it at more like 5.5 to one. That is a more normal ratio for a new product, but clearly the goals of this roll-out, and for this country in terms of the benefits brought by it, need us to go much farther than products that are just happy to sell in market, but only reach a small number of consumers who want it. The ambitions clearly have to be comprehensive as well.
Q
Sacha Deshmukh: The best research that I am aware of in this area is being conducted by Populus, although there is other research as well. As I said, the context is that the vast majority of smart meter consumers are very content and feel significantly better served than they were in the analogue market, but there is no doubt that for those consumers who are less satisfied, it is linked to a customer service issue. Dhara has talked about some of those issues with the legacy of dumb meters: maybe not getting accurate bills for years, and then getting them.
There has been lots of debate, and indeed some regulation has been put in place, about consumer protections in those situations. Citizens Advice also work carefully on that. Indeed, we funded training for Citizens Advice advisers, because they are a very important port of call for people who find themselves in such situations. No doubt some other areas in which there has not been satisfaction have been linked to those customer service issues.
Dhara Vyas: I just want to expand on the customer service breakdowns of what consumers experience with smart meters. We have been collecting consumer data on smart meters from customers who contact our consumer service since 2011. Since then, we have done monthly analysis of what people are contacting us about. Contacts with us have risen in proportion with the number of meters on walls, as you would expect. It is a bit of a canary in the coalmine, with them pointing out and drawing attention to issues with the Department for Business, Energy and Industrial Strategy and Ofgem—so with the Government and Ofgem—and directly with the suppliers.
We hold bilaterals and try to address issues before they become more widespread, and we talk about systemic issues with the entire industry and industry body. They mostly break down into seven categories, including billing and tariff, as you would expect, and as I have touched on. We get quite a few information and sales calls as well, with people asking, “Are they compulsory? Do I have to have one?” We have seen a spike in those recently, with deemed appointments that Ofgem has recently allowed suppliers to—
Q
Dhara Vyas: Yes, and some letters from suppliers have been parsimonious with the truth, saying things like, “Your meter is at the end of its life. We are going to come and install a smart meter.” There is a lack of clarity about the fact that it is not mandatory. You do have a choice. When I was looking through the stats, I saw that in one case last month, someone felt very strongly that they were being blackmailed into having one, and they did not want one. They felt like they were being bullied. That has recently become an issue, and I know that trading standards are concerned about that. The communication needs to be more refined.
Other contacts include those relating to faulty metering equipment, and people who cannot top up make up a big proportion of those. There are people who are unable to switch, who have switching-related issues or who just have an issue related to installation. For example, an engineer coming in has meant that their boiler has been condemned because the engineer could not relight it, so there are things to do with appliances in people’s homes.
The issues are wide-ranging, but they have a huge impact on people’s lives and how they use energy in their home—as long as they can continue to use it. It is important to be aware of those things in order to address them and not let them proliferate.
Three colleagues now wish to ask questions—Mr Kerr, Mr Lewis and Mr Morris—and we are aiming to finish at 3.15 pm.
Q
Dr Sarah Darby: Yes—without compromising the programme as a whole.
Q
Dr Sarah Darby: You would have to ask BEIS about that.
Dr Richard Fitton: I remember seeing in the trade press that some consideration is being made of recycling existing meters, but I do not know. Again, it is an excellent sustainability—
Q
Dr Richard Fitton: Or indeed to some of the smart meters being installed today. I have swapped suppliers and they have taken away new smart meters, four or five months after. I do not know; sorry.
Q
Dr Richard Fitton: I believe, as the Minister has mentioned, that SMETS 1 are to be upgraded to SMETS 2 starting at some point next year. There is no particular technological challenge in connecting consumer access devices to SMETS 1 meters, but you can sympathise with some people who might be waiting for the full SMETS 2 systems to be installed. That seems commercially obvious to me.